Global meltdown: China, India on separate paths

By
David Hoskins

Published Mar 26, 2009 8:06 PM

The International Monetary Fund has revised its 2009 forecast to project the
first global economic contraction in 60 years. The revised IMF figures estimate
the world economy will shrink by as much as a full percentage point this year.
Advanced economies alone are set to decline by more than 3 percent. The deep
recession in developed countries is expected to continue throughout the year
despite the enormous sums that have been spent on fiscal stimulus efforts.

The IMF was predicting just this January that the global economy would grow by
0.5 percent. The sharp revision reflects the speed with which the meltdown has
caught capitalist economists by surprise. The IMF is a champion of imperialist
globalization. It is quite possible that the estimates of a 1 percent decline
continue to understate the severity of the crisis.

While developing economies are projected to experience continued growth for
2009, their growth rates have been impacted by the global recession. The World
Bank recently cut its 2009 projections for China’s economic growth from
7.5 percent to 6.5 percent. Most economists have also significantly cut
expected growth rates for India.

The Economist Intelligence Unit has estimated that China and India are two of
just four Asian countries expected to expand in 2009. Japan’s economy, by
contrast, is expected to decline by as much as 5.8 percent.

Different paths in good times and bad

An article by Somini Sengupta, titled “As Indian Growth Soars, Child
Hunger Persists,” recently examined the divergent results economic growth
has had in India and China. (New York Times, March 13) Even after a decade of
spectacular economic growth, Indian child malnutrition rates are worse than in
many sub-Saharan African countries. Indicators such as these begin to paint a
picture of growth in India that is strikingly different than that of
neighboring China.

More than 42 percent of Indian children under five suffer from malnutrition, as
measured by their weight. India is a low-income country where 80 percent of its
population struggles to survive on less than $2 a day. Thirty-nine percent of
the population cannot read or write and India’s infant mortality rate
rests at 32 deaths per 1,000 live births.

In China just 7 percent of its children younger than five are underweight. The
proportion of its population surviving on less than $2 a day has been cut to 35
percent. The country has almost achieved universal literacy. Its infant
mortality rate is 21 deaths per 1,000 live births.

What accounts for this difference in popular welfare in two of Asia’s
emerging powerhouse economies?

Conditions reflect history

China and India share a lot in common. The two countries have a long history,
are separated by a common border, and have populations that exceed one
billion.

The countries have different political histories, however, and their current
political leadership and method of economic organization are fundamentally
different. The New York Times hints at this, even as it peppers its examination
of China with the usual allegations and innuendo that the U.S. media reserves
for left-wing and anti-imperialist governments of any type.

China has been more successful in reducing child poverty and hunger because of
the efficiency of its centralized state and the firm leadership of the
Communist Party of China. The leadership of the CPC has allowed China to
utilize the socialist features of the Chinese state to lift children up, even
after three decades of risky experimentation with market reforms.

The power of the CPC is rooted in the People’s War of Liberation led by
the party and its Red Army. The CPC took power after first driving out the
Japanese occupation forces and then decisively defeating the U.S.-allied armies
of Chiang Kai-shek.

CPC Chairman Mao Tse-tung declared at the founding of the People’s
Republic of China in 1949 that “the Chinese people, comprising one
quarter of humanity, have now stood up.” China put the humiliation of
colonialism behind it as it embarked on an independent path of workers’
power. China’s revolutionary history is evident today as it strides
against the poverty and suffering of its past.

India, by contrast, is plagued by an inefficient and corrupt bureaucracy that
in recent history has been led by either the bourgeois Indian National Congress
or the ultra-nationalist Bharatiya Janata Party. Both parties represent the
bosses and landlords who oppress India’s workers and peasants. Both are
strategic allies of U.S. and British imperialism.

India emerged from almost a century of direct British Crown rule in 1947 when
Britain handed the reins of power to the Indian bourgeoisie. This transition
came after a long period of struggle led in large part by the Indian National
Congress.

The INC had become India’s main vehicle for social reform and agitation
for independence. It was a bourgeois party whose leader, Mahatma Gandhi, was
against arming the people in the struggle to free the country from
Britain’s grip. Gandhi propagated a cult of non-violence that limited the
independence struggle and prevented India’s workers and peasants from
conquering state power. India’s communist movement was unable at the time
to lead the independence struggle to its logical conclusion of socialist
revolution. The consequence can still be seen as the vast Indian masses suffer
while a few profit from the country’s economic boom.

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